REFORMS IN MINING POLICY
BACKGROUNDER
The Ministry of
Mines allows mining activity in pursuance of the mineral concession
granted under the provisions of the Mines and Mineral (Development
and regulation) Act, 1957 (MMDR Act) and rules framed thereunder.
Under sector 3(e) of the MMDR Act, certain minerals are notified
from time to time as minor minerals for which the States are empowered
to frame rules for grant of mineral concessions, while for all
other minerals (major minerals), the mineral concessions are granted
by the State Governments subject to the rules prescribed in Mineral
Concession Rules, 1960.
However, mining
activities are also subject to other laws of the land including
the Forest (Conservation) Act, 1980, and rules framed hereunder
and Environment (Protection) Act, 1986 and rules and notifications
issued thereunder.
Implementation
of reform process in the mining sector is a continuous process.
The National Mineral Policy (NMP) was announced in 1993 and the
mining sector was thrown open for private investment including
foreign investment. To give effect to the NMP and to take the
reforms process forward, extensive changes were made in the Mines
and Minerals (Development & Regulation) Act, 1957 (MMDR Act)
in 1994 and 1999 and Rules framed thereunder were accordingly
amended.
The reform process
encompassed inter alia opening up of the mining sector to private
investment including foreign investment, delegation of powers
to the State Governments, simplification of procedures, ushering
in an investor-friendly climate comparable with best global practices
and ensuring systematic scientific mining.
Under the provisions
of Section 18 of the MMDR Act, 1957, Central Government have notified
Mineral Conservation and Development Rules, 1988 for conservation
and systematic development of minerals and protection of environment.
Appropriate penalties have been provided for contravention of
these Rules.
Interaction meetings
with State Governments, Central Ministries/Departments and the
investors in the mining sector are held from time to time to make
the policy and procedure of grant of mineral concession investor
friendly and to sensitise the various stakeholders about the reform
process. A tripartite meeting of Central Government, State Governments
and investors was held in November 2001 followed by the 27th
meeting of the Mineral Advisory Council and Conference of State
Ministers of Mining and Geology on September 21, 2002 and January
22, 2003 respectively to accelerate the reforms.
In the process
of ongoing consultation with the stakeholders, it has been decided
in the conference of State Ministers of Mining and Geology that
for giving thrust to the mining sector reforms, the rules framed
under the MMDR Act, 1957 shall incorporate provisions relating
to minimum size of mining lease, and detailed provisions regarding
mine closure plans and rehabilitation of mined out areas.
